Buying a Unit vs Buying a House - Which is the better investment?
If you're considering property as part of your investment strategy, deciding between a unit and a house can have a big impact on your long-term outcomes.
Here’s a balanced comparison to help clarify the pros and cons:
Units (Apartments)
Pros
Lower entry price
Generally more affordable, allowing investors to enter the market sooner or diversify across multiple properties.
Lower maintenance (managed by body corporate)
Body corporate manages common areas and exterior maintenance.
Amenities Attract Tenants
Facilities like pools, gyms, or secure parking can improve rental appeal.
Strong Demand from Renters
Popular with young professionals, singles, students, especially in inner-city areas.
Cons
Limited Land Value
You own less land, and land is typically what appreciates most over time.
Body Corporate Fees
Ongoing fees can eat into cash flow and reduce net returns.
Restrictions on Renovations
Some areas, especially CBDs, can become oversaturated with units, affecting capital growth and rents.
Oversupply Risk
Some areas, especially CBDs, can become oversaturated with units, affecting capital growth and rents.
Houses
Pros
Greater Land Component
More land means greater long-term capital growth potential.
More Control
Fewer restrictions on what you can do with the property (e.g., renovations, granny flats, development).
Diversification of Strategy
Suitable for value-add strategies like subdivision, dual occupancy, or renovations.
Tenant Appeal for Families
Houses in good school zones or suburban areas attract long-term tenants.
Cons
Higher Purchase Price
Larger upfront costs, which may delay entry or reduce the ability to buy multiple properties.
Higher Maintenance Costs
You’re responsible for all upkeep (roof, plumbing, garden, etc.).
Lower Rental Yields
Especially in blue-chip suburbs or areas with high land value but low rent returns.
More Time-Intensive
More involvement required for maintenance, renovations, and tenant management.
